First Quantum mum on next move after Inmet rejects offers

First Quantum Minerals Ltd. said it is “surprised and disappointed” that Inmet Mining Corp. chose to reject its two takeover offers and not engage in any discussions.

However, the company did not indicate whether it will attempt a hostile bid.

First Quantum made two proposals to Inmet over the past four weeks, the latest of which was worth $4.9-billion in cash and stock, or $70 a share. Toronto-based Inmet made its rejection public on Wednesday, while also adopting a shareholder rights plan to give it time to evaluate any hostile offer.

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“The transaction would have presented an opportunity to realize immediate and attractive cash value for the holders of Inmet shares while preserving the opportunity for both sets of shareholders to participate in the substantial upside value that we believe would be created through a combination,” First Quantum chief executive Philip Pascall said in a statement.

First Quantum wants to buy Inmet to get its hands on Cobre Panama, a US$6.2-billion copper development project that is only beginning construction. The company argued that its experience building large copper projects would be useful in the execution of Cobre Panama.

In rejecting the $70-a-share offer, Inmet argued that it is “highly conditional.” First Quantum appeared to disagree. The company said it asked if it could do 14 days of due diligence on Cobre Panama. Apart from that, it said the conditions were “customary” for this sort of transaction.

First Quantum also noted that it believes Inmet shareholders would be supportive of the proposed merger.

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